German Exchange Cleared To Trade Digital Assets

German Exchange Cleared To Trade Digital Assets

On March 30, the digital asset brand of the Boerse Stuttgart exchange group, Boerse Stuttgart Digital, revealed that its blocknox service acquired a final licence to operate as a crypto custodian. The German Federal Financial Supervisory Authority (BaFin) licensing enables the Boerse Stuttgart Group to fully offer regulated brokerage, trading, and custody of digital assets. 

Ritterschlag für die @bsdex_official: Sie bekommt die offizielle #BaFin-Lizenz für die Verwahrung von #Kryptowährungen.https://t.co/MV8vUicatH

— BTC-ECHO (@btcecho) March 30, 2023

The statement further asserted that it could offer institutional investors simple solutions for accessing and trading crypto, along with fiduciary custody. However, it expects European banks, asset managers, and brokers to use these simple solutions for their digital asset offerings. 

Additionally, Boerse Stuttgart Group CEO, Dr. Matthias Voelkel, stipulated that:

‘’ This is the first time an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions. We are now the only one-stop-shop fully regulated by BaFin In Germany for brokerage, trading, and custody of digital assets.’’

Further, Voelkel noted that the European brokers, banks, and family offices could incorporate its services into its digital asset offering. Additionally, the Managing Director of Boerse Stuttgart Digital, Dr. Oliver Vins, noted:

‘’ The BaFin license reinforces us on our path to provide financial institutions across Europe with secure access to a growing market for digital assets using these essential principles.’’

German Custody Services

Noteworthy, the German crypto trading platform bitcoin.de operator, Bitcoin Group SE, revealed its complete acquisition of Bankhaus von der Heydt in December. According to the announcement, the bank was licensed for digital asset custody and tokenization services. On the other hand, in February, the German asset manager DZ Bank, partnered with Swiss Metaco to provide crypto services, including custody. In a report by Cointelegraph, the chief sales officer at Metaco, Craig Perrin, gave his remarks concerning the partnership, noting:

‘’ Metaco’s infrastructure is specifically designed to support institutions adopting digital assets and participating in the digital asset economy. We are excited to reveal this cooperation as it further establishes Metaco as a market leader in Germany, trusted by some of the country’s largest banks and exchanges.’’

Blocknox, a part of Boerse Stuttgart Digital Ventures, has provided custody services under a provisional licence since January 1, 2020. In a tweet by Boerse Stuttgart on February 18, 2020, it revealed its plans, detailing Blacknox’s crypto custody offer, which will also be available in fintech companies and banks.  

Within our group, blocknox takes care of the custody of #cryptocurrencies on an escrow basis (for users of @bisonapp&@BsdexE). Looking ahead, blocknox plans to offer custody services also to institutional clients such as #fintechs, banks & asset managers: https://t.co/lSUqQmYOQ5 pic.twitter.com/lpPWtySPzp

— Börse Stuttgart (@boersestuttgart) February 18, 2020

The exchange firm commenced trading services with German clients a month prior. Its press release gave some requirements, including users limiting themselves to deposit and withdraw and trading bitcoin against euros. Additionally, it required users to prove their identity digitally, hold a German bank account, and be eighteen years old. 

In January 2021, BSDEX rolled out a trading app for cryptocurrency traders. The new application enabled users to trade cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and XRP. However, Boerse Stuttgart Digital has received its BaFin custody licensing, as other significant crypto exchange contenders, including Binance, are still waiting.

Boerse Stuttgart’s Endeavours in Crypto Services

However, Boerse Stuttgart is the sixth-largest stock exchange in Europe and has been venturing into crypto services for many years. It operates exchanges in Europe, Sweden, and Switzerland and has offices in Zurich and Ljubljana. As of now, most retail customers have benefited from excellent liquidity, effective risk management, and high resilience along the whole value chain.   

On the other hand, Nasdaq, a Global Exchange Group, recently revealed its plans to offer crypto custody services by the end of Q3 this year. This is after the bankruptcy of various crypto lenders triggered traditional finance companies, leading to Nasdaq stepping in to fill the gap. However, according to Ira Auerbach, the Senior Vice President and head of Nasdaq Digital Assets, the exchange group is working on getting all the necessary regulatory approvals and technical infrastructure. Further, the exchange executive noted that the firm has applied to the New York Department of Financial Services for a limited-purpose trust company. 

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